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Authorised Financial Adviser
Code of Professional Conduct

Financial advice in New Zealand, through a financial adviser, is regulated via the Financial Advisers Act 2008 (the FAA), Financial Service Providers Registration and Dispute Resolution Act 2008, Financial Adviser (Disclosure) Regulation 2010, and Financial Service Provider Regulations 2010.

Financial Advisers from 1 July 2011 who offer investment planning services must comply with the "Code of Professional Conduct for Authorised Financial Advisers" and be registered with the Financial Markets Authority, www.fma.govt.nz . Many financial advisers, or those working through financial organisations (QFE) have decided not to register as an Authorised Financial Adviser and give advice on insurance or simple investment products. The code of Professional Conduct only applies to Authorised Financial Advisers, but registered financial advisers (RFA) still need to comply with the skill, knowledge and competence expected of an adviser.

Minimum standards of ethical behaviour

  1. When providing financial adviser services, an AFA must place the interests of the client first, and must act with integrity.
  2. An AFA must not do anything, or make an omission that would or would likely bring the financial advisory industry into disrepute.
  3. An AFA must not state or imply that the AFA is indepdent, or that the AFA's financial adviser services are independent, if a reasonable person in the position of a client would consider that the AFA, or the services provided are not independent.
  4. An AFA must not borrow from or lend to a retail client.
  5. An AFA must not provide financial advice to a retail client in relation to a financial product that is not offered to the public if the AFA is a related person of the product provider of that financial product.

Minimum standards of client care

  1. An AFA must behave professionally in all dealings with a client, and communicate clearly, concisely and effectively.
  2. An AFA must ensure each retail client has sufficient information to enable the client to make an informed decision about whether to use the AFA's financial adviser services and /or to follow any financial advice provided by the AFA.
  3. When providing a personalised service to a retail client an AFA must reasonable steps to ensure that the personalised service is suitable for the client.
  4. Where an AFA provides a personalised service to a retail client that is an investment planning service or that relates to a category 1 product, the AFA must provide a written explanation to the client of the basis on which those services are provided. The AFA must take reasonable steps to ensure the client is aware of the principal benefits and risks involved in following any financial advice provided s part of that service, having regard to the characteristics of the personalised service.
  5. When providing a class service to a retail client, an AA must take reasonable steps to ensure the client is aware of the limitations of the service provided.
  6. An AFA must ensure there is an appropriate internal process in place for resolving client complaints in relation to the AFA's financial adviser services.
  7. An AFA must record in writing adequate information about any persoanised services provided to retail clients.
  8. An AFA must ensure that records of all information and documents required under this Code are kept for a minimum of 7 years.

Minimum standards  of competence, knowledge and skills

  1. Before providing a financial adviser service, an AFA must have the competence, knowledge and skills to provide that service.
  2. An AFA must have an adequate knowledge of the Act, the Code and other legal obligations relevant to the operation of the AFA’s practice as a financial adviser (including relevant consumer protection laws), that is adequate for the proper operation of that practice.
  3. To be an AFA, a financial adviser must attain the Unit Standard Sets within the National Certificate in Financial Services (Financial Advice) (Level 5) that are relevant to the financial adviser services provided by the AFA.
    For the purposes of the Code, an AFA is deemed to have attained a particular Unit Standard Set where the AFA has attained an alternative qualification or designation to that Unit Standard Set specified in the Code's Competence Alternatives Schedule.

Minimum standards for continuing professional training

  1. An AFA must maintain and keep current a professional development plan for each CPD period.
  2. An AFA must undertake sufficient continuing professional training to maintain the AFA’s competence at a level appropriate for the financial adviser services the AFA provides or intends to provide, and keep up to date with developments relevant to the AFA’s practice.

Unit Standard Qualifications

Unit Standard Set A: Knowledge of the industry, financial markets, the advice process and products.
Unit Standard Set B: Knowledge of the Code and consumer protection laws.
Unit Standard Set C: Professional practice advice process and complying with legislation.
Unit Standard Set D: Investment Unit Standards.
Unit Standard Set E: Insurance Unit Standards, or Residential Property Lending Unit Standards

Refer to:
Lyford Investment, Financial Advisers
Richard Renfrew PhD, CFP Authorised Financial Adviser FSP35821